Insight

AirAsia's ancillary income grows by 88 percent

Published: 02 Dec 2008: AirAsia Berhad has witnessed 88 percent growth in its ancillary income during the July-September quarter, in comparison with the same period last year.

Published: 02 Dec 2008: AirAsia Berhad has witnessed 88 percent growth in its ancillary income during the July-September quarter, in comparison with the same period last year.

Commenting on the same, LCC´s CEO Tony Fernandes said: "The per passenger ancillary spend has increased by 52 percent to RM23.1 per passenger. Ancillary income now represents 10.6 percent of total revenue. This will be the driver for strong profit margins going forward."

AirAsia has reported a net loss of 465.5 million ringgit in the July-September quarter, reversing a 180 million ringgit profit in the same period a year ago.

It was the first quarterly loss for AirAsia since it was publicly listed November 2004.

Fernandes said: "The resilience and strength of AirAsia produced a strong set of results of 43 percent revenue growth to RM659 million driven by strong passenger growth and ancillary income. The core operating losses of RM76 million was lower than expected despite operating in extreme volatile and high fuel prices."

"Passenger numbers grew by 24 percent to 3.0 million which attest to the sustained strong demand for our services. We expect to carry a total of 20 million passengers across the AirAsia Group in 2008. Load factor for the period was at 75 percent, which is in line with expectations as we added significant capacity of 33 percent and introduced five new routes during the period. Yield (Rev per ASK) was up by 12 percent driven by 12 percent higher average fare and strong contribution from ancillary income."